Myth Busting: The Laissez-Faire Origins of American Higher Education

摘要

A common misperception among higher-education scholars is that the sector was characterized by a free market during the antebellum period. The validity of the laissez-faire origins hypothesis is examined in this paper within the framework of a true free market for higher education, which consists of three general areas: privatization, competition, and property rights. Although the hypothesis refers to the postrevolution, antebellum period, higher education at this time was largely influenced by developments during the colonial era, which was characterized by privately chartered colleges that were granted regional monopoly powers and provided with various subsidies. Many of the interventionist colonial policies were adopted or modified by state governments after the revolution. Higher education was largely subject to a decentralized political economy, but the federal government did exert a significant influence on the sector through its enactment of land-grant policies and the Dartmouth College Supreme Court case. Although the latter has been credited with promoting competition in higher education by granting corporate rights to privately chartered colleges and protecting their property from arbitrary confiscation by government, it is argued here that this case, along with the land-grant policies, promoted the rise of public institutions. The promotion of state-controlled and subsidized institutions distorts the allocation of resources and hinders competition and is thus inconsistent with laissez-faire.